Top issues facing corporate treasurers today.

• Author: Prysock, Mark
• Position: Washington Insights

A recent survey of corporate treasury practices by consulting firm Treasury Strategies Inc. indicates that economic impacts--some direct, some not--have been the largest factors influencing corporate treasurers' priorities for 2003.

Tight credit markets, for instance, have raised the importance of effective working capital management and cash flow forecasting processes, and a difficult economic environment has forced treasurers to become even more focused on the efficiencies and controls enabled by well-implemented technology solutions and operating structures.

The annual Treasury Strategies survey is one of the firm's ongoing research tools to assess the treasury management function, monitor the changing landscape and provide benchmarking data to the treasury community, in 2003, 131 corporate treasurers and treasury executives participated in the survey, providing information about their organizations, key issues, technology platforms, international structures and current initiatives.

Among the survey's key findings, six points stand out:

* Liquidity Management Tops the List. Nearly one-third of all respondents mentioned liquidity as the most significant issue facing treasurers, in response, treasurers are focusing on ensuring adequate funding, enhancing cash forecasting tools, more effectively managing banking relationships, reviewing cash management structures and assessing the optimal capital structures for their organizations.

* Limited Influence on Working Capital Management Decisions. Treasurers often have little control over key areas of working capital management that impact corporate liquidity needs. While most survey respondents reported having high influence over or direct control of banking decisions, they said they had much less influence over customer credit and payment terms, billing practices, capital expenditures and payables practices. Treasurers have the opportunity to significantly improve liquidity management by becoming more involved in these related financial functions, which have typically resided in the business units or the accounting function.

* Treasury Staffing Levels Stabilizing. Despite a difficult economic period, treasury staff levels have remained stable over the past year. Almost two-thirds of all respondents reported no change in their number of full-time employees.

* Sarbanes-Oxley Is a Key Corporate Concern, but Is Not Driven by Treasury. It appears that the responsibility for addressing Sarbanes-Oxley...